Google to buy Looker for $2.6bn to expand cloud offering

Google has struggled to compete with larger rivals Amazon and Microsoft in the cloud space. AP

Alphabet’s Google agreed to buy Looker Data Sciences for $2.6 billion, expanding its offerings to help customers manage data in the cloud.

The acquisition will give Google a new tool in its campaign to sell more cloud storage and software. So far, the company has struggled to compete with larger rivals Amazon and Microsoft and late last year, Google replaced its head of cloud, Diane Greene, with longtime Oracle executive Thomas Kurian.

Looker, based in California, helps companies visualise and analyse the data they store in the cloud. The deal is Google’s biggest since it acquired smart-home company Nest Labs for $3.2bn in 2014, according to data compiled by Bloomberg.

Any dealmaking by Google now will get a close look by regulators, since the company is facing an antitrust investigation by the US Justice Department.

“I think it will get scrutiny because these are complicated businesses and there is so much sensitivity around small acquisitions by the big tech companies,” said Jennifer Rie, an analyst with Bloomberg Intelligence. However, Ms Rie said she doesn’t think owning Looker will “disadvantage any other competitors or have any real potential for harm. I do think the regulators will take a close look, however.”

Cloud is important for Google because growth is slowing in its core search advertising business. Google already has analytics tools, but the company noticed many of its customers were also using Looker, Mr Kurian said in an interview.

“Looker complemented the Google cloud analytics foundation,” he said. Google doesn’t plan to cut off Looker from working with its competitors, because many of its customers use more than one cloud, Mr Kurian said. Working with other cloud systems is a critical part of Google’s overall strategy, he said.

Mr Kurian has been concentrating on hiring new sales people and refocusing Google’s cloud efforts on several key industries. Investors and analysts have repeatedly asked when the company will do a major acquisition to boost its presence in the space.

“We have been very disciplined in building our sales, go-to-market capability, and our own products. We have chosen Looker as a very complimentary technology that a lot of customers will find value in very quickly,” said Mr Kurian.

The two companies already share more than 350 joint customers. Looker’s chief executive Frank Bien will stay on at Google and report to Mr Kurian.